July 31, 2008

Miliband reflects grimly on Labour's future

Yesterday morning, Miliband proved he has a ruthless streak, one that can change the political landscape. The article in which he focused on the future of Labour without mentioning Gordon Brown ensured that the noise around the leadership question got a lot louder. More significantly, he would have known that this would be the consequence of his intervention. For the first time, the tumultuous speculation about Labour's future had acquired deadly definition.

He's right, of course. There is little purpose in Gordon Brown's lieutenants complaining of disloyalty to the leader. Nor is there much credibility in it, when you consider Brown's conduct towards Tony Blair from 1994 to 2007. David Miliband's bid for the leadership is a rational course, from his own point of view and that of the party.

It might have been prudent for Miliband to appear less jaunty in his response to press questions yesterday, but he is responding to a risk of unprecedented electoral defeat. Labour has suffered electoral meltdown before - in 1931 and 1983 - but has recovered to win landslide victories (coincidentally, 14 years later in each case). Labour faces heavy defeat again, and on a scale that might precipitate a decline like that of the French Communists - once the dominant force on the French Left, now a rump. In previous landslide defeats, Labour has at least been able to hold on to its regional redoubts. Even in 1983, the party still retained more than 200 seats. The party is now in uncharted territory. There is literally not a seat in the country that it could confidently expect to retain in a by-election. Scotland and Wales are no longer Labour strongholds. The party has lost the mayoralty of London to a Tory candidate who was widely (and clearly mistakenly) regarded as a joke when he launched his campaign.

(Incidentally, and on a point of autobiographical interest to me though no interest to anyone else, the reason I never supported the SDP in the 1980s - unlike many of my friends of similar political outlook - was a straight assessment that there could be no successful left-of-centre party independent of Labour. I don't claim this was a principled way of reasoning, and I don't think in retrospect that it was legitimate for an Atlanticist to vote Labour in the 1983 election, as I did, even knowing that the party had no chance of victory. But it was how I thought at the time about Labour's purported programme for government - alternately incredible and disgraceful. I do not think the same calculation would necessarily hold now.)

On Miliband's political draw, I recommend a column by my colleague Camilla Cavendish in The Times today. She writes:

The hole that Labour is in goes deeper than the economy. So it is important to understand what “platform for change” Mr Miliband is proposing. His pitch is that a refreshed Labour Party must combine “government action and personal freedom”. But he is shy about saying where the balance should be struck. To be fair, he has been saying for two years that people want more control over their lives, and that Labour must devolve more power to people. He said it again yesterday - but without a whit of detail. The only policies that he mentioned sounded strangely like a manifesto for more government - windfall taxes on utilities, family-friendly employment laws, state-funded childcare, and “more protection from a downturn made in Wall Street”. (By which he emphatically did not mean letting taxpayers keep more of their own money - one of his aides laughed when I made that suggestion.)

This is an acute observation. I do not perceive in David Miliband the Blairite impulse. In my view, Tony Blair was so keen to reconcile Labour to a market economy that he even went too far in consulting with corporate interests (which is not at all the same thing, business being merely one lobby among many). But it was a mistake in an understandable direction. I assume that, as Miliband does not mean an easing of the tax burden, he must mean some sort of regulatory change that would make the economy less vulnerable to ructions in the financial sector.

Heaven knows, I'm aghast at what's happened in the financial system. Unserviceable mortgages in the US were sold on to investors in various forms of asset-backed securities. The world's credit and monetary system has now seized up, with costs felt by ordinary consumers. But I wonder how far Miliband has thought through his proposed remedies, if indeed he has any. I don't mean that disparagingly. It's just that regulation in response to a financial crisis has a habit of not working as it's intended, while imposing unnecessary costs. On this and much else, Miliband's political instincts are not clear from the leadership pitch he's making. Labour's position is far too weak for such studied ambiguity.

Comments

I'm a bit wary of Milliband. I don't know if he's quite got the right ideas for reinvigorating the Labour Party. However, so long as he is not Harrient Harperson, I would vote for him as a Labour member.

Whilst it is true that regulation has lots of adverse unforeseen consequences (and 20years of experience of regulation by the DTI, SIB - remember them- and FSA reinforces the point) the fact is that banks and other financial institutions which will rely on Govt to be bailed out when things go wrong must expect to be better regulated. After all any bailout comes from the taxpayer and if we're paying I think we should have a say in what we're paying for.

"if we're paying I think we should have a say in what we're paying for."

I agree. But we also would want to ensure that regulations (or the monitoring and audits that come with regulations) do not preclude the banks from doing what they are meant to do. So for example, I do not want to see regulations that would (effectively) preclude the banks from lending me money.

Yes, we need to know what we are paying for--more to the point we would like to give the markets some assurance that the meltdown is being (somewhat) controlled. But we also want to be able to walk into a bank and get a loan when we need to. At least I do.

This demonstrates the quality of bank management, I'm afraid. There are no new regulatory obstacles to stop banks lending to individuals. 2 years ago, banks were trying to give the stuff away and now they are really tough in lending. The FSA warned banks in their lending practices against procyclicality if they wanted to benefit from IRB status for capital adequacy purposes(that is don't lend too easily in boom times and too toughly in slowdowns). Sure, sure said the banks. I think you can see why people are a little sceptical about banks' management.

Fortunately, if Labour goes down the plughole, it matters not one iota - since the Electoral Commission has recognised the existence of the British People's Alliance.

And it also appears that although David Lindsay (or 'Cllr David Alexander Stephen Lindsay') has taken on the triple roles of Leader, Nominating Officer and Campaigns Officer, he does appear to have a sidekick, in the form of Mr David Maurice Evans.

As an outsider (I'm Australian) I've been following recent UK politics with interest. While it's pretty certain Labour's heading for a thumping at the election, I wonder why you and others speculate so openly that they might be almost destroyed as a party. Plenty of governments have copped floggings before and bounced back- the Tories were wiped out in 1997 and only a decade later are favourites to win a landslide. What is so different about Labour now compared to the Tories then, or Labour itself in the 80's? Just interested in the feeling on the ground in Britain. Cheers.

An another Australian (currently in Britain), this is something I too have found odd about British politics: whenever a party loses an election convincingly, the political classes (on both sides and in the media) seem convinced that it is now curtains for that party: Labour in the 1980s, Conservatives in the 1990s, and (if they lose) Labour again after the next election. As can be seen, the losers nonetheless bounce back. I sometimes wonder if the reason for this gloom-full prognosis is the folk-memory of the fate of the Liberals, who never regained office again after their defeat in 1922.

So, to answer your question, there is nothing inherent in the current situation that says Labour won't bounce back. That won't stop the Hanrahans working the issue to death, though.

Marcus and Peter, that's a fair question, which merits a full response. I will post on this later in the week. I do, however, believe that the 1997 election might easily have destroyed the Tories as a party vying for government, especially given how long it took them to acknowledge the scale of their catastrophe. Had Labour and the Lib Dems done what Blair and Ashdown envisaged, then I consider that would have been the outcome.

Michael, that's wonderful news about David Lindsay and the British People's Alliance. My only query is why the indefatigable BPA supporter Martin Miller is not also a party officer. I hope you'll keep an eye on this one for us.

Splendid news about the British People's Alliance. Looking down the list of registered political parties, however, it seems that Cllr Lindsay will have his work cut out to distinguish his party from some of its rivals, such as the People's Alliance and the Christian People's Alliance. Can we dare to hope that Cllr Lindsay will soon unveil his party's long-awaited website?

I'm also pleased to report that my quest for a photograph of the BPA's leader has finally been rewarded - allowing us all to test the truth of his assertion that, like Barack Obama, he is 'visibly mixed-race'. I hope that Oliver will publish this photograph in any future posts on the British People's Alliance, so that the face of Cllr David Alexander Stephen Lindsay may soon become as well known as that of the BPA's leading supporter Neil Clark.